New research says AI will raise wages for lower skilled workers more than anyone else

[Sharon79]

A new study from Stanford economist Lukas Althoff concludes that AI is likely to reshape jobs rather than eliminate entire occupations, and will ultimately raise wages across the workforce, with the biggest gains going to lower skilled workers specifically. His modeling estimates these workers could earn 15 to 45 percent more over their lifetime than they would without AI's support, with the gains potentially even larger depending on how quickly the technology continues to advance

The underlying mechanism is task simplification rather than task elimination. By reducing the specific skills required to perform many job tasks, AI lets lower skilled workers take on higher paying roles they previously couldn't access, which Althoff's modeling suggests would actually narrow the wage gap between the highest and lowest earners rather than widen it as many have feared

Not every path through education fares equally well in this framework though. For workers who do pursue a college degree, majors intensive in manual and technical skill, mechanics, engineering, culinary arts, cosmetology, architecture, transportation and physics, are projected to do better in the job market than degrees heavy in verbal and social skills, including political science, sociology, philosophy, law, religion and women's studies

Althoff notes that lower skilled workers have actually been slower to adopt AI so far, but not slowly enough to undo the technology's overall equalizing effect in his model. He describes the paper's contribution as translating now standard measures of AI exposure into meaningful wage and employment impacts for each individual in the economy, accounting for a worker's particular strengths and weaknesses, their capacity to learn new skills, and broader economy wide shifts in demand for goods and services, producing what he calls a more disciplined set of predictions about the AI economy than the field has typically offered

Skilled Workers Ai Worldphys.org